Practice English Speaking&Listening with: Why Trains are so Expensive

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Before I start, I want to quickly mention that I started a podcast with Brian from Real

Engineering calledShowmakers.”

In the very first episode which is out now we chat with none other than Hank Green.

Id really appreciate if you give it a try and the link is down in the description.

Trains are expensive.

So expensive, in fact, that on three of the most travelled routes in three countriesNew

York to Washington in the US, Edinburgh to London in the UK, and Paris to Lyon in Francetheyre

pretty much the same price as the plane.

These routes start at $49, £30, and30 respectively on the train and $52, £13, and

53 on the plane.

On a longer route like New York to Chicago, the difference is even more pronounced: $59

for the plane, $108 for the train.

And thats keeping in mind that trains are subsidized or government run in almost every

country while airlines are highly profitable commercial enterprises.

The planes flying between DC and New York are $49 million dollar machines, while the

trains traveling the route cost no more than $10 million total.

The plane has to burn 1.7 gallons of fuel per mile flown (3.9 liters per km) while the

train relies on cheap, clean electric power.

All this therefore begs the question, why are trains so expensive?

Now, I mentioned that fares between DC and New York start at $49, but thats far from

the average price—$73.

Lets look at the expenses that go into that fare.

The single largest expense for Amtrak is staffing.

Trains require a lot of people to operate.

85,000 passengers journey on Amtrak daily, but for that Amtrak employs 20,000 people

meaning that, daily, Amtrak requires one employee for every four passengers.

On top of that, the majority of those working for Amtrak are highly specialized, unionized

workers who demand high salaries.

Amtraks financial reports tell us that they spend $105,000 per employee, but thats

not to say that everyone at Amtrak is making six figures.

Taxes and benefits typically cost an employer 30-40% of a salary so the actual average salary

for an Amtrak employee is around $75,000.

These salary costs are so high that they account for over a third of the ticket price between

DC and New York—$25.82 total.

The cost of employees is so high for train operators largely because trains are so slow.

For a flight from DC to New York, an airline would only have to pay employees for an hour

of work while Amtrak has to pay their employees for three and a half hours of work.

The difference is even more striking on long-haul routesChicago to Los Angeles for example.

An airline would have to pay for four hours of work, while Amtrak pays for 44 hours of

work.

In addition, trains have physical infrastructure to maintain along the journeythe rails.

Airlines also have infrastructure to pay for on each endthe airportsbut between those

they just use the sky, which is free.

Amtrak only owns 730 miles of the 21,000 miles of track they use, but they still indirectly

pay for the employees who maintain those 20,000 miles of rented track through the fees charged

by the track owners for their use.

The next largest cost for train operators is that of the trains themselves.

Trains arent that expensive compared to airplanes, but they still cost millions of

dollars.

The locomotive pulling the train from DC to New York costs $6.5 million dollars and then

each one of the passenger cars costs an additional $400,000.

With a seven car train, that works out to $9.4 million dollars which accounts for $9.67

on this particular ticket.

The other part of infrastructurerailscosts Amtrak an additional $3.66 on this ticket.

Railroad tracks are extraordinarily expensive to buildtypically more than $1 million

per milebut on routes like DC to New York, theyre just used so much that the per train

or per ticket cost is negligible.

Amtrak is a business, so it also needs to pay to run the business.

$2.15 of this ticket goes to administrative costs, and then another $1.31 to advertising.

Moving on, trains are extremely safe compared to cars, but youre still more than 3 times

as likely to be killed on or by a train than a plane.

Trains do occasionally crash, and they also crash into people.

When this happens, Amtrak often has to pay a settlement to the victims, and the fees

associated with that account for $0.79 of the DC to New York ticket.

That does mean that when traveling between DC and New York, in essence, youre paying

$0.79 in order for Amtrak to kill or injure people.

Those were all the major costs to run a train, but theres still another $5.91 on that

ticket that just represents other minor costs.

So the total expense for Amtrak to run that train is $50.14.

The remaining $22.86 is pure profit.

You see, the train from DC to New York, the Northeast Regional, is one of the few Amtrak

routes to make a profit.

The demand, speed, and frequency of the train helps it succeed financially where other routes

failed.

Per passenger per mile, Amtrak makes eight cents of profit on the northeast regional,

the low speed train, and 29 cents per passenger mile on the Acela Express, the high-speed

train.

These profitable routes help pay for Amtraks unprofitable routesand there are a lot

of them.

Some routes like the Sunset Limited between New Orleans and Los Angeles lose as many as

21.7 cents per passenger per mile, and when passengers can travel 2,000 miles on that

route, thats a lot of loss.

As I mentioned, that $49 fare is not the average ticket price to travel between DC and New

York.

The $49 fare is the price at which Amtrak starts selling tickets, but as the date of

travel nears, the price can increase to hundreds of dollars.

That might seem like price gouging, but its actually a way to make sure everyone can afford

a ticket.

Thats not to say Amtrak and other train companies are these altruistic organizations

trying to bring travel to the massesit just makes more money.

Especially with trains where it costs the operator roughly the same to transport 5 passengers

as it does to transport 500, the operator always wants to have as many seats as possible

filled, even if that means selling cheap tickets.

In a perfect world for the operator, they could ask every potential passenger what the

maximum amount theyd be willing to pay for a journey is.

If they adapt the ticket price to every passengers maximum price then they can fill each seat

with passengers paying the highest possible amount.

However, in practice, nobody would ever answer the question truthfully so it would never

work.

Ticketing systems, however, try to ask this question subliminally.

Going back to that route from Edinburgh to London, the operator, Virgin Trains East Coast,

sells three types of ticketsadvance, off-peak, and anytime.

The advance tickets range anywhere from 30 pounds to 140 pounds, the off-peak fares cost

137 pounds, and the anytime fares cost 148.50 pounds.

For the advance fares, there are a certain unknown number of tickets at different price

levels on sale and once theyre gone, theyre gone.

For example, there might be 15 tickets at 30 pounds and once theyre sold, the price

would increase to 35 pounds, then 40, 45, and so on a so forth.

That encourages those who can buy early to buy early.

Normally that means tourists.

Tourists tend to plan far in advance and are more budget conscious since theyre paying

their own costs.

Theyre also more likely to travel down to London on the often cheaper plane since

theyre less attracted by the convenience of the train.

These advance fares are only valid for the exact route, day, and time bought which is

fine for leisure travelers, but business travelers typically want more flexibility.

Buying advance fares often doesnt work for business travelers since their plans are

only made a few weeks or days in advance and, since they dont personally pay for their

tickets, its no problem for them to pay for the convenience of taking the train on a flexible

ticket.

Thats why they often pay £148.50 for an anytime ticket.

With these, you can just hop on a train wheneverit doesnt matter if its in 10 minute or 10

days.

You just step on the train and take a seat.

The middle ground between those two is the off-peak single which lets you take any train

that arrives in London after 11:17 am or is on the weekend.

These fares are still geared towards business travelers, but by restricting against the

early morning trains they give a discount to those who can avoid the busiest morning

trains..

For each of these fares there are equivalents in first classthe advance first fares range

between 40 and 200 pounds, the off-peak fares are 185.50 pounds, and the anytime fares are

236.50 pounds.

On top of that, young, disabled, and elderly people get up to 1/3 off their fares with

a rail-card.

This all means that there are essentially 12 different types of tickets for sale and

that one person heading to London might be paying 20 pounds while the person sitting

right next to them is paying 200 but what theyre really paying for is convenience.

Now, back in the US, if Amtrak only operated profitable lines, their route map would look

like this, but the routes that dont make money are the ones that really matter.

Amtrak serves over 500 destinations in 46 statesmany of which are small towns with

no other means of public transportation.

While trains are normally the more expensive means of transport, they are less expensive

than planes to service small communities.

The small airports in the rural parts of America are extraordinarily expensive to operate.

Even if there are just two or three flights a day, they still need a runway, terminal,

security, and air traffic control while a rural train station needs barely any infrastructure

or maintenance.

In fact, its cheaper to fly from Chicago to London ($741) than it is to fly from Havre,

Montana to Chicago ($811 May 17-22) whereas Amtrak brings passengers from Havre to Chicago

for only a few hundred dollarsmuch more in budget for the average resident of Havre

who makes only $22,000 per year.

Of course this is a political issue, but a part of why trains are so expensive is to

allow train operators to fulfill obligations to serve small communities who need solid

transport links.

Research has shown that ease of access to transport has a stronger influence on whether

someone will earn more than their parents did than the level of crime in their area

or whether they grew up in a two-parent household and so keeping trains running through rural

America is incredibly important.

Next time you take the train from DC to New York, just keep in mind that that $22.86 of

profit goes to making sure that someone from Havre can get to Chicago for less than you

can fly to Europe.

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